OptionsHouse

Options Trading News

November 28, 2012  Wed 10:44 AM CT

TLT: SEE CHART GET CHAIN FIND STRATEGIES
A trader is adjusting a huge position in the TLT Treasury exchange-traded fund as it tries to rebound.

The iShares 20+ Year Treasury Bond Fund is up 0.26 percent to $125.61. The fund, which was at an all-time high of $132.22 in late July, bounced off support at $118 in mid-September.

optionMONSTER's systems detected the sale of 22,708 January 124 puts for $1.96, far above the previous open interest of 1,671 contracts and therefore a new position. Seconds later, a block of 11,354 March 124 calls was sold for $4.15 in volume that was less than the open interest of 14,439 at the start of the day.
 
So it appears that the trader is unwinding a January long call position that is now in the money while selling nearer-term puts in a more neutral stance that can profit if the TLT is anywhere above $124 at expiration. (See our Education section)
Share this article with your friends


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Market Level Making You Nervous, Huh? Part 3

In last week's article, we discussed how important the extra cash you save by using the Stock Replacement Strategy over buying the actual stock is! That extra cash in our account instead of being unnecessarily tied up in a stock position allows us to buy the puts we would need to protect our downside in the case of a major sell-off.

View more education articles »